The proliferation of multi-functional portable devices has impacted the way digital media is marketed and played. The impact has been so great that lawmakers have begun to question traditional copyright laws, meant for an earlier age when content to be protected was bound to material artifacts and not instantly reproducible—and distributable—as pure digital information. Considering the size of the music market alone, estimated at around $12 billion in the U.S., there have been surprisingly few solutions that uniquely address the distribution economics of digital media.
As shown in FIG. 1, most, if not all, economic ecosystems for digital media are based upon on-line systems 100 that market, recommend, sell, and store each media clip into a user's personal computer or portable media player, via the Internet 102. A popular example of such a system is APPLE'S combination of an online store 104, ITUNES, with a media player device, the IPOD 106 (Apple Computer, Inc., Cupertino, Calif.). Typically, a digital rights management (DRM) system is used to protect the rights of the media content's copyright holder 108 by encrypting the media with a secret key 110 securely stored into the media player. Such systems 100 suffer from the exposure of the secret key 110. Once revealed, the key 110 can be used to arbitrarily edit the DRM information. In addition, the “analog hole” problem has plagued DRM systems. Once decrypted (into human-intelligible form) and played, the media content can be captured in its “plaintext” (non-encrypted) format, re-recorded, and distributed at will, thereby losing its previous protection.
These two problems, compromise of the secret key 110/DRM information, and re-capture of the raw analog version of the content as re-distributable media, have driven copyright holders 108 to seek their revenue on-line—primarily via client-server architectures, where the majority of the marketing, storage, and processing burden is imposed upon the servers while limiting customers to purchasing clips only when they are connected to the Internet 102.
As shown in FIG. 2, the on-line economic platform just described does not address the widespread phenomenon of file sharing 200, in which a dubious file sharing service 202 hosting convenient search mechanisms and enormous media availability does not support the possibility of selling/purchasing content for the benefit of the copyright holder 108. In most file-sharing platforms 200, content distribution is economically isolated from copyright holders 108.